AI and machine learning (AI/ML) tools hold great potential to spark revolutionary changes across the insurance industry.
Areas that AI could improve include risk assessment, underwriting, claims management and customer interaction, to name a few.
With this in mind, InsurTech Digital speaks with Elias Ghanem, Global Head of Capgemini Research Institute for Financial Services, about how AI and machine learning can be leveraged to improve customer experience, as well as the wider insurance sector.
How is AI and machine learning automating customer service in insurance and improving chatbot telephone experience?
“One significant area where AI and ML can make a substantial impact is in customer interaction. While ML algorithms can be deployed to automate functions such as data entry, processing, and analysis, freeing up employees to focus on more intricate and demanding tasks that require human expertise, AI-powered predictive analytics can analyse diverse customer data, including demographics, transaction history, website behaviour, and social media activity enabling the anticipation of customer needs and preferences.
“Once the customer needs are identified, AI tools like chatbots, and workflow automation allow customer care teams to handle higher ticket volumes without increasing personnel, enhance agent productivity and even detect customer sentiment and intent, helping route inquiries accurately and reducing escalations. AI-powered chatbots, for instance, have the capability to deliver instant customer support, address inquiries, provide policy information, and guide users through the claims process.
“With AI/ML, insurers can leverage customer data for better decision-making, and offer more personalised policies. The emphasis on AI/ML in the customer experience includes measuring sentiment for routing, improving agent workflows, and intercepting requests for sales or customer service representatives. As AI advances, customer service becomes more personalised, with tailored product recommendations and customised interactions.
“From the increased adoption of chatbots to the creation of immersive customer experiences, AI/ML can transform how companies interact with their customers. However, it is essential to remember that these technologies complement human expertise rather than replace it. By combining these technologies with human expertise, companies can create exceptional customer experiences that drive loyalty.”
How is AI boosting personalising sales? And do embedded insurance offerings help with bespoke sales offers?
“AI will play a pivotal role in tailoring sales efforts by using data and automation to comprehend and fulfil individual customer requirements. Embedded insurance options further enhance the sales experience by aligning with the specific products or services that customers are acquiring based on their individual risk profiles. This combination is driving a significant shift in how insurance is delivered and experienced.
“By utilising bots and AI-driven solutions, insurers can proactively engage customers with personalised interactions, and guide them through the sales process thereby boosting engagement, retention, and sales conversion rates. Additionally, AI's ability to segment customers based on their characteristics and behaviour enables sales teams to craft targeted marketing campaigns and offers that resonate with specific audience groups, ultimately facilitating sales closure.
“Simultaneously, embedded insurance presents insurers with a unique opportunity to seamlessly integrate insurance products or coverage options into a customer's buying experience, typically at the point of sale, and thus potentially expand the customer base, and reduce acquisition costs. Additionally, insurers can negotiate favourable commissions, and utilise real-time data, to enhance genuinely personalised pricing and strengthen their position in the insurance market.
“In the quest to choose the right AI and embedded insurance offerings, insurers should consider collaborating with InsurTechs to adopt the right technology and noninsurance product and service providers to integrate the sale of their coverages into the initial transaction process while reinforcing their central role and navigating disintermediation concerns.”
How is AI making claims processes more efficient?
“Traditionally, insurance claims processing has been a time-consuming and resource-intensive task, often plagued by paperwork, manual data entry, and the need for human intervention at various stages.
“This inefficiency not only led to delays in claims settlement but also resulted in higher operational costs for insurers. Nevertheless, AI has emerged as a solution to tackle these issues by offering a unified view of the entire ecosystem that prioritises product-centric approaches while being adaptable to various platforms.
“AI and ML expedite claims initiatives by boosting NPS scores with quicker processing, accuracy, and fraud detection, while also cutting operational costs through automation and predictive analytics.
“Natural language processing (NLP) [in particular] includes optical character recognition (OCR) and chatbots, understand and interpret text data for automating claims processing and Computer vision, analyse geospatial information sourced from satellites, and examine images or videos submitted by customers or drones. As a result, they help claims adjusters process property reviews significantly faster than often dangerous manual inspections.
“Integrating AI into claims processing empowers insurers to make well-informed decisions on intricate claims, meticulously analysing customer data, scrutinising behaviour patterns, and thoroughly assessing claim documentation. This scrutiny ensures the authenticity of claims while addressing concerns of potential fraud.
“Yet, the primary challenge lies in building a robust ML-based claims processing solution seamlessly integrated into existing systems. The crucial first step in this journey is gathering high-quality data to develop accurate predictive models for claims processing.”
Is it still important to retain a balance between technological upgrades to customer service and maintaining a human touch?
“Although technological upgrades have revolutionised insurance operations through automation, offering benefits such as enhanced efficiency, error reduction, and quicker responses to customer needs, it's crucial to emphasise that maintaining a human touch remains indispensable.
“According to Capgemini’s World Life Insurance Report 2023, among customers aged 50 and above, 68% prefer face-to-face interactions with agents, while only 14% opt for self-service through digital tools like virtual assistants, robo-advisors, or chatbots.
“To strike a balance between technology and human touch, insurers can leverage advanced technologies like cloud computing, APIs, robotic process automation, and digital platforms that help intermediaries, agents, and financial advisors to interact effectively with customers and policyholders resulting in a superior customer experience. These tools break down operational silos, enhance ecosystem connectivity, and centralise and standardise data, facilitating hyper-personalised experiences.
“Insurers can also offer customised solutions that combine data-driven insights with human expertise. Customers can choose their preferred interaction mode, whether digital or human. Augmenting human agents with technology empowers them to provide better, data-informed service. Continuous customer feedback is essential for adapting to evolving preferences.
“The right balance between technological upgrades to customer service and maintaining a human touch is an ongoing process demanding flexibility and responsiveness to evolving customer needs and expectations. Hence, insurers must adapt to this dynamic landscape to provide the best possible service to their customers.”
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